We reported at the beginning of the month that Au Optronics was piloting the production of the iPad mini 2 with a display pixel count of 324 pixels per inch. Today, news out of Korea states that sources have confirmed that Apple has asked LG to deliver a premium class iPad mini display for their future iPad mini 3 pushing pixel density to over 400 pixels per inch for the 7.85 display. Report Updated at 3:45 PM MST
In order to accomplish 400 + pixels per inch on a 7.85 inch display, LG and other Apple supply chain manufactures will have to retool to what is known as a low temperature polysilicon (LTPS) process because the displays with full HD resolution requires LTPS processing instead of the current amorphous silicon (a-Si) type processing.
According to an LG rep in Barcelona that was showing off their new 5.5 inch Phablet with 400 ppi. The rep stated that the human eye can only see 437 ppi (see video). So Apple's desire to get the iPad 3 to that point is a very credible goal, especially being that LG already produces displays at that level as shown in the video below.
Whether the iPad mini 3 is being scheduled for 2013 or 2014 is unknown at this time.